The Chancellor announced in his Autumn Statement that the rate of Corporation Tax (CT) will increase to 25% from next April for companies with profits over £250,000. Companies with profits of £50,000 or less will pay 19%, while those companies whose profits are between those limits will be taxed at a proportional rate between 19 and 25%.
We are not accountants, so do please seek detailed advice from your accountants on such matters. But we do understand that the Patent Box scheme is continuing and that its value will be even greater when the new CT rates come into effect.
In simple terms, if you have a granted patent covering one of the products you sell or processes you use, and have generated profits relating to the patented invention, then the CT payable on those profits is reduced to 10%. The reduction can be backdated to cover the period between filing of the patent application and grant of the patent as well.
As the GovGrant website says: “The innovation does not have to be rocket science to be patentable. Most patented inventions are just small technical improvements on existing products or processes.”
If you are thinking about introducing new products or processes, or just technical improvements in existing ones, speak to Keith Loven or Tim Fray in confidence* on 01522 801111 to see if you might be able to apply for a patent as a basis for your Patent Box.
* It is vital that details of your invention are still confidential on the date you apply for a patent, so don’t start selling the product or using the process, or release details of them publicly, until your patent application is on file at the IPO.